Cossette - Fourth Quarter and Fiscal Year 2009 Results

Highlights from the fourth quarter 2009:
- Gross income increased by 0.3% to $52.3 million compared to the
previous quarter.
- EBITDA(1) margin was 8.8% of gross income, taking into account the fees
related to the strategic review process that resulted in a reduction of
2.3% of EBITDA margin.
- Goodwill impairment of $17.2 million.
- Strong cash position of $28 million and improved balance sheet.

"In the fourth quarter, we registered a slight increase in our revenue compared to the third quarter, as well as an increase in our EBITDA, two signs that things are moving in the right direction. We have made the necessary moves to align our cost structure with our current revenue stream and are positioned to benefit from a revitalized economy", commented Claude Lessard, Chairman and CEO.

The goodwill impairment tests were completed during the fourth quarter ended September 30, 2009, using the enterprise value derived from the strategic review process. Consequently, a non-cash impairment of $17.2 million was recorded in this fourth quarter in addition to the non-cash impairment of $10.4 million taken in the third quarter of fiscal year 2009.

Cossette recorded gross income of $52.3 million for the fourth quarter of fiscal 2009, ended September 30, 2009, compared to $66.7 million in the corresponding quarter of the previous fiscal year. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1) amounted to $4.6 million for the fourth quarter of fiscal year 2009, compared to $8.1 million in the corresponding quarter of fiscal year 2008. For the quarter, loss from operations was $14.5 million, including non-cash goodwill impairment of $17.2 million and strategic process expenses of $1.2 million, compared with earnings from operations of $5.8 million in 2008. Net loss amounted to $16.5 million, compared to net earnings of $2.5 million for the fourth quarter of 2008. For the quarter, cash flow from operating activities before changes in non-cash working capital items was $2.9 million, compared with $5.7 million in 2008.

Highlights from the year 2009:
- Gross income decreased by 14.2% to $217.4 million.
- EBITDA(1) margin was 6.4% of gross income, taking into account expenses
mainly related to severances, client-related expenses, insurance on
certain accounts receivable and fees incurred for the strategic review
process that resulted in a reduction of 4.5% of EBITDA margin.
- Goodwill impairment of $27.6 million.
- Miles Calcraft Briginshaw Duffy Limited ("MCBD"), Elvis Communications
Limited ("Elvis") and PainePR LLC became wholly-owned subsidiaries
following the acquisition of their non-controlling interest.
- Improved balance sheet position by reducing the net debt position from
$39.0 million to $0.7 million and decreasing future earn-out payments
and potential additional equity interest obligations from $40.5 million
to $13.0 million.

"Two major events impacted our revenues this year: the global recession that hit all of our industry, and a significant reduction of business from two important clients. The reduced business of these two clients alone represents nearly 87% of our total revenue reduction," commented Claude Lessard, Chairman and CEO.

"Importantly, the quality of our creative product has continued to receive outstanding recognition in all our markets. Finally, I would like to acknowledge that the dedication of our people and the loyalty of our clients have remained unchanged in spite of the current circumstances related to the future ownership of the Company," he concluded.

For the year ended September 30, 2009, Cossette recorded gross income amounting to $217.4 million, compared to $253.3 million reported in the twelve-month period of fiscal 2008. EBITDA amounted to $13.9 million for the twelve-month period ended September 30, 2009, compared to $30.4 million in the corresponding period of fiscal 2008. Loss from operations for the twelve-month period of fiscal 2009 was $22.5 million, including non-cash goodwill impairment of $27.6 million and $9.8 million of expenses mainly related to severances, client-related expenses, insurance on certain accounts receivable and fees incurred for the strategic review process. For the same period in 2008, earnings from operations were $17.9 million. Net loss for the year ended September 30, 2009 was $33.9 million, down from net earnings of $8.9 million for the same period in fiscal 2008. Cash flow from operating activities before changes in non-cash working capital items in the twelve months of fiscal 2009 were $11.2 million as compared to $ 23.5 million for the same period of fiscal year 2008.

Cossette also acquired the remaining minority interests in MCBD and Elvis, which have now become wholly-owned subsidiaries of the Company. MCBD, an advertising agency, is one of the most awarded agencies in the United Kingdom for its creative work and has won top awards and Campaign of the Year for its Hovis work in 2008. Elvis, a direct marketing agency, was also named Agency of the Year 2009 in the United Kingdom.

Management's Discussion and Analysis, containing a full analysis of financial results, is available on SEDAR (www.sedar.com).

Cossette Inc. offers a full range of leading-edge communication services to clients of all sizes, including some of the most prestigious brands in the world. A customer-driven organization built around highly specialized business units, Cossette also offers Convergent Communications(TM), a unique working method that brings added value to the client by integrating various services offered by the group, including strategic planning and research, advertising, media buying and channel planning, sales promotion, direct response, database and direct marketing, customer relationship management, interactive marketing and technology solutions, public relations, organizational communication and change management, sponsorship and alliance marketing, branding and design, ethnic marketing, business-to-business communications (B2B practices) and print and video production. Cossette has approximately 1,437 employees and offices in Quebec City, Montreal, Toronto, Vancouver, Halifax, New York, Irvine, Los Angeles, London and Shanghai.

Forward-looking statements - This press release may contain statements that are forward-looking in nature. These forward-looking statements may involve, but are not limited to, comments with respect to the Company's business or financial objectives, its strategies or future actions, its targets, expectations for financial condition or outlook for operations and future earn-out and additional equity interest obligations. Forward-looking statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements as a result of various factors, including downturns in general economic conditions and resulting changes in client business and marketing strategies, consolidation and globalization of client brand strategies, the highly competitive nature of the communications industry, the greater resources available to much larger global agencies, low entry barriers for new competitors, dependence upon a limited number of clients contributing a significant percentage of income, inability to acquire new clients or new assignments from existing clients due to client policies prohibiting performance of similar services for competing products or companies, the Company's ability to successfully integrate acquired and to-be-acquired businesses and the retention of key management, creative and technical personnel. Assumptions relating to the foregoing involve judgments and risks, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although management believes that the expectations reflected in the forward-looking statements are reasonable based on information currently available, it cannot assure that the expectations will prove to have been correct. Accordingly, undue reliance should not be placed on forward-looking statements.

Financial analysts are invited to participate in a conference call with management December 4, 2009, at 10:00 a.m. The media and any stakeholders may attend the call in listening mode only. Please dial (514) 392-1478 or 1-877-461-2815 (Canada & US) or 00-800-6578-9898 (Global Toll Free). A replay will be available at (514) 861-2272 or 800-408-3053, passcode 3415776# until December 20, 2009 and on the investor relations section of our website at www.cossette.com.